Bye, bye slots

Sunday

Jun 9, 2013 at 6:00 AM

Robert Nemeth

Having been targeted as the site for a slot machine parlor for 2-1/2 months, Worcester suddenly escaped the bullet. It didn’t happen because of the skilled and forward-looking leadership of city officials — there was no such leadership — but because the would-be gambling operator, Neil Bluhm of Chicago, concluded the deal wouldn’t be lucrative enough for him.

The package fell apart when the developer announced that a promised full-service hotel, located somewhere downtown, was no longer on the table. Actually, the hotel link never made much sense, because no matter how much profit the slots might make, they wouldn’t produce enough money to finance a luxury hotel that was to be built with 100 percent local union labor, as promised in a memorandum of understanding. Slot machine users are a walk-in clientele, unlikely to stay at a hotel. The usually come from the neighborhood.

The parlor proposed for Worcester was particularly concerning because of its location and the kind of equipment it involved. It would have been sited on former Wyman-Gordon property along Madison Street, within walking distance of downtown, the library, the YWCA, several colleges and a notorious traffic bottleneck called Kelley Square.

As reported by the Research Bureau, it would have featured the latest electronic equipment, which has been designed to be far more addictive than the old “one-armed-bandit.” The new machines no longer require the player to pull a lever, merely to push a button. They enable much faster play, as many as 1,200 games per hour. They accept debit and credit cards in addition to cash. They are designed to create the visual illusion of frequent “near misses,” and make periodic small payouts, intended to extend the gamblers’ TOD –— time on device — and thus increase overall losses.

In an article titled “Slot parlor is too risky for Worcester” that appeared in the Boston Globe, Edward L. Glaeser, a Harvard economist, outlined the risks. “Putting Massachusetts’ only dedicated slot parlor into a vulnerable area in Worcester — a city that hopes to emulate Seattle but is at risk of being Buffalo — seems as dangerous as drawing to an inside straight,” he wrote. “Call me paternalistic, but we should steer gambling away from poor communities — not concentrate it in places like Green Island, where the median household income is about $25,000.”

Mr. Glaeser, whose article should be required reading for all city officials, points out that slot parlors are capital-intensive, not labor-intensive, which is to say they depend far more on machines than human workers. An operator that needs workers with skills tailored to specialized machines is unlikely to hire from the local neighborhood. Moreover, slot parlors entail a series of social ills, ranging from alcohol abuse and traffic accidents to bankruptcies and gambling addiction.

“These problems, which some communities might view as manageable, are more worrisome in Worcester, a former hub of industrial innovation that perpetually teeters on the brink between information-age success and rust-belt failure,” Mr. Glaeser noted.

In view of all the risks, staying away from slots should have been a no-brainer for city leaders. But instead of leading, they practiced the art of the copout. Only one of 11 members of the City Council, Konstantina B. Lukes, stated opposition to a slot parlor. The others allowed the city manager to enter into negotiations for something called a “host agreement” with Rush Street Gaming, to be followed by a citywide referendum in which “residents would decide.”

That would have put the city on a slippery slope. A special-interest referendum, with only a fraction of the voters going to the polls, could easily tip the balance in favor of gambling, even if the stay-home majority opposes it. By sitting on the fence, city officials avoided their responsibility to the community. Would they have the same laissez-faire attitude if someone proposed a string of bordellos in Worcester or growing pot on the common?

Organized gambling is the most predatory industry in America. It uses sophisticated technology, advanced psychology and market strategies to profit from the financial losses of citizens. It banks on human weakness, contributing to crime, bankruptcy, poverty, breakup of families, child abuse and all manner of addictions. No wonder that Las Vegas, the gambling capitol of the country, has the highest number of suicides, in addition to exceptionally high poverty rates. Atlantic City has suffered similar problems, with crime rates increasing by 300 percent between 1977 and 1981, the years immediately following the legalization of casino gambling.

Unlike Massachusetts, which expanded state-sanctioned gambling and is pushing hard to issue casino licenses by the end of the year, New Hampshire recently rejected a proposal to bring slots and table games to the Granite State. It did so despite an argument by Gov. Maggie Hassan, who said New Hampshire needed additional revenue for education and highways because it doesn’t have sales tax or property tax. Massachusetts residents pay both of those taxes, but Beacon Hill politicians want more, regardless of the revenue source. They should not get it.

“Worcester should realize that urban success is made by long, slow investments in education and entrepreneurship, not by the shiny spin of the slot machine,” Mr. Glaeser wrote. “The future of Worcester depends on attracting the skilled and ambitious, with a pleasant, inexpensive city that is close to Boston’s economic dynamo.”

Robert Z. Nemeth’s column appears regularly in the Sunday Telegram.

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